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16 July, 2011

Forests reality swayed Gunns

THERE is little point in the Tasmanian native forest industry crying that the sky will fall in because of Gunns' decision to sell the Triabunna sawmill to a non-industry investor.

The sky fell in probably two years ago. This is just the latest bit of debris to fall.

It shows that it is high time Tasmania came to grips with what Gunns has been saying for the past 18 months - that the industry in Tasmania needs significant structural change if there is to be a long-term future in native forestry.

It was a very difficult decision made by Gunns to sell an asset historically pivotal to southern Tasmania's native forest sector, and what has been the economic hub of the Triabunna community.

We gave Aprin time beyond the deadline, and worked hard with them to make it happen.

My first obligation is to Gunns' shareholders, and for reasons fair or foul Aprin could not get their finance in order in time. Aprin now knows what Gunns has known for some time.

Financial backers won't risk the pressure inflicted on them by interest groups, and why should they run that risk for an investment in a declining industry?

Whether we like it or not, native forestry in Tasmania is in serious trouble, and the negotiations over the forest principles are possibly the only way to soften the impact of that fallout.

It was on this basis that Gunns made a condition of sale to Triabunna Investments that the mill continue to operate as required for the Forest Principles Agreement to work. We insisted on this and it was accepted.

This was no sell-out of the industry.

We could have done that 12 months ago if we wished but we have worked tirelessly and consistently to try to achieve a successful outcome for the industry, consistent with the forest principles.

We marketed the sale of Triabunna to numerous customers and industry peers. There was no interest.

This was no backflip by Gunns. We have consistently stated that we are exiting from native forests and that we were working to achieve an orderly exit from our facilities in line with the forest principles.

And now, even in the absence of an industry operator to purchase Triabunna, we have still ensured an outcome consistent with those principles.

Industry signatories to the principles were consulted in relation to our decision to sell Triabunna to Jan Cameron and Graeme Wood. There was no resistance provided the facility had the opportunity to operate consistent with the principles.

That is what has been achieved.

We would hope that a successful implementation of the principles leads to a sustainable future for the Triabunna mill.

The success or failure of that now lies with the signatories of the principles and governments to implement.

It is difficult for all Tasmanians to see the harsh realities of a once proud industry on its last legs.

It is a reality that Gunns has had to face and which it has tried to soften in its actions to accelerate out of a fading industry and carve out a new future in plantation pulp production.

The linkage with the tactics of the environment groups also can't be ignored. They have influenced our customers and our funders.

There's no point crying foul. Gunns has just done what we have to do to get the business back on to a stable footing. That means a commitment to get out of native forestry.

We have honoured that commitment but worked to try to ensure an ongoing industry outcome for those that wish to continue in the native-based industries. And we will continue to do that.

Tasmania needs to imagine a future with not just a pulp mill, not just a national park and winery tourist industry, not just a world-class art gallery. It needs to work hard to broaden its economy and make it truly sustainable for years to come.

So I say to the industry, start some joint problem-solving.

Do this for the sake of the communities struggling to come to terms with unforgiving change.